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References and extracts
References and Abstracts
SHELL SHORES UP SERVICE STATIONS
WITH SUPER-SELL
Sydney Morning Herald 10/15/1992
Why go to so much trouble? The executive director of Shell Australia, Mr Peter Smedley, said research had revealed that appearance was among the top three considerations of customers looking to refuel.
-------------------
Shell spent two years redesigning its stations and enhancing its corporate logo.
---------------
Shell is not the first international oil company to invest so many resources and so much time in revamping its image.
SHELL DIRECTOR TO TAKE OVER AT
CML
Australian Financial Review 11/10/1992
THE Colonial Mutual Life Assurance Society has moved to boost its flagging fortunes by naming an outsider to the life industry as managing director-elect.The company announced yesterday that Mr Peter Smedley would take over as managing director next year- -
THE REASON INSIDERS ARE OUT
...
Australian Financial Review 01/22/1993
The chairman of one of the nation's oldest and most tradition-bound institutions had said effectively that CML needed an outsider. CML's choice of the 49-year-old Smedley was even more surprising for the fact that he had no experience in superannuation and insurance.
-----------------
CML, faced with a variety of indicators of sliding performance - not the least being a downgrading by Standard and Poor's - decided to look outward.
COLONIAL MUTUAL SETS OUT TO SHED
'MEDIOCRE' IMAGE
Sydney Morning Herald 05/08/1993
Colonial Mutual's chief executive, former oil man Mr Peter Smedley, has announced a sweeping management and operational shake-up of the Melbourne-based financial group after a rigorous four-month review of its operations.
-------------------
"We do not choose to be mediocre, and we will not have mediocrity thrust upon us," Mr Smedley said."We aim to be a market leader in the segments that are relevant to our strategies."
Colonial Mutual Revamps
Divisions
The Age 05/08/1993
``In the aftermath of the recession these are tough times, and we recognised the need to become a leaner, flatter, market-driven organisation,'' Mr Smedley said.He said the company was planning more retrenchments, but that it ``would be a managed process''.
FORMER OIL MAN CATALYST FOR
CHANGE AT LEANER CML
Australian Financial Review 05/10/1993
The influence of Peter Smedley's 29 years, basically in marketing posts, with Shell shows in his emphasis on getting much closer to customers and in an emphasis on the bottom-line result.He says that in present tough times Colonial Mutual recognises that it needs a "leaner, flatter, market-driven organisation" to cope with increasing competition and different demands from the marketplace.
-------------------
Peter Smedley admits that there has been something of a culture shock, both for Colonial Mutual employees and for himself in the settling-in period.
CML PUTS FAITH IN A DARK
HORSE
Sydney Morning Herald 02/21/1994
Unlike the other life insurance CEOs Smedley has not spent most of his life closeted in the cosy environment the industry has enjoyed until the past two or three years.
---------------------
Having spent that much time abroad and with 12 years to go in Shell before retirement, Smedley, who has five children ranging in age from 10 to the mid-20s, did not want any more overseas postings - a likely scenario for an executive with such broad international experience and a considerable time to go to retirement.
--------------------
He inherited a host of problems, including a public perception that CML's reserving levels were dangerously low and its products uncompetitive both in terms of costs and returns which resulted in an alarming slide in market share.
----------------------
As a general rule, Smedley believes in short chains of command, which he says facilitate better market focus and closer proximity to grass roots, as well as simple distribution systems
BANK SALE PUTS GOVT ON THE
SPOT
Sydney Morning Herald 05/21/1994
This has unexpectedly left Melbourne-based insurance group Colonial Mutual Life - initially considered a rank outsider - as the only bidder left from the seven major financial institutions the State Government hand-picked to bid at the beginning of the sale process.
-----------------------
After all, they argue, why should Colonial persevere when its six competitors have dropped out? What possible reason would compel an organisation to fork out close to $600 million to purchase a bank which has notched up combined losses of close to $55 million in the past 18 months?
-----------------------
So far, Colonial looks very keen: it has spent millions of dollars to reach this stage of the sale process. And it has amassed an army of expensive advisers to help it make up its mind about the State Bank.
BANK SET FOR FAT-TRIMMING
Australian Financial Review 06/01/1994
COLONIAL Mutual Life chief executive Peter Smedley must have many concerns on his mind as he contemplates shelling out more than a third of his policyholders' funds to buy the State Bank of New South Wales.But it's a fair bet that near the top of his list is the question of who's going to pay for the hundreds of State Bank employees that won't be needed after the takeover.
----------------------------
THOSE terms would appear to prevent Colonial Mutual making a big redundancy program and branch restructuring immediately after acquisition.
CML BUYS 50PC OF MALAYSIAN
INSURANCE GROUP
Australian Financial Review 09/07/1994
THE Colonial Mutual life office has substantially upgraded its Asian business by acquiring a 50 per cent stake in a Malaysian life insurance business controlling $20 million of funds.
COLONIAL MUTUAL BREAKS THE ICE
ON DEMUTUALISATION
Australian Financial Review 09/28/1994
DEMUTUALISATION of a life insurance company is a rare event in Australia, and there is no precedent for a restructuring of the type contemplated by Colonial Mutual Life Assurance Society as it moves to acquire the State Bank of NSW.
---------------------------
The requirement for Colonial to demutualise comes from the Banks(Shareholding) Act, which provides that any entity owning a bank must have a wide range of shareholders, effectively preventing mutual life companies from owning banks.
SMEDLEY STRATEGY LEAVES NO ROOM
FOR MLC LIFE
Australian Financial Review 09/30/1994
Colonial managing director Mr Peter Smedley said yesterday the life office's board of directors adopted a strategic plan in May last year which included the requirement that Colonial be a broad-based financial services group which included banking.
Tension Behind The Bank Deal
That Nearly Wasn't
The Age10/01/1994
Colonial set itself an enormous task in coming to grips with a bank with $19 billion of liabilities, as well as negotiating a hugely complex purchase agreement in a matter of months.
SMEDLEY PLANS DEMUTUALISATION
FOR CML
Australian Financial Review 10/03/1994
But the plunge into banking was far from opportunistic.A strategic review conducted by a team of Colonial staffers, assembled by Mr Smedley shortly after he took the reins of the life group in April last year, had already identified very strong opportunities for life insurance companies from moves into banking territory.
It had identified the mutual structure of Colonial as an impediment in the corporate environment of the 1990s and beyond, and had identified a major weakness in the group's operations though a lack of representation in NSW.
-------------------
Mr Smedley raised the idea of abandoning the mutual company structure shortly after he took the top job, to test the waters.
BANK BUY A SHATTERED 'DREAM'
Australian Financial Review 11/22/1994
THE conclusion of NSW Auditor-General Tony Harris that the State Bank is worth at least $100 million less than the State Government will get from the sale must be a blow to Colonial Mutual Life boss Peter Smedley.It will also come as a rude shock to Colonial Mutual Life policyholders. After all, they're the ones who will pay a very heavy price indeed if the State Bank acquisition is a bum deal.
--------------------
Using a more sober set of profit expectations - but the same discount rate- CML would appear to have paid at least $200 million over the top.
-------------------
As Smedley and his advisers are not known for commercial recklessness, it can be assumed they have a plan to make the acquisition pay.
---------------------
After many years of staff reductions, State Bank would appear to be still seriously overweight with staff when compared with other regionals.
S&P DOWNGRADES COLMUT TO A
PLUS
Sydney Morning Herald 12/03/1994
The international ratings agency Standard and Poor's has downgraded Colonial Mutual, in a move that deals a psychological blow to the life group's plan to restore its fortunes by way of the $576 million acquisition of State Bank of NSW. - - - - - Colonial reacted angrily to the downgrade.
COLONIAL SLASHES BANK BOARD
Sydney Morning Herald 12/31/1994
The State Bank of NSW's board has been gutted following the finalisation of the sale yesterday, with only two board members surviving the ownership change.
$2.6b Negative Revenue Swing
Rocks Colonial
The Age 04/21/1995
The group's announced result was a $258 million earnings loss, compared with a $678 million profit a year earlier, a drop of just under $1 billion.
------------------
Mr Smedley said the group's five-year plan which will see the company demutualise and publicly list was on track.
CML takes a $261m bath
Australian Financial Review 20 Apr 1995
COLONIAL Mutual Life Association has turned in a shocker: a $261 million loss, on the back of a wipe-out on its investment portfolios of more than $1 billion
State Staff Shake-up
Continues
Australian Financial Review 08/04/1995
THE shake-up of senior management at State Bank of NSW took a new turn yesterday when the bank announced that it had replaced its head of retail banking, Mr David Sandig, with a former oil company executive, Mr Stuart James. - - - - who has spent his 25-year working life with Shell Australia and Shell International Petroleum, becomes the third executive from the oil company - -
COLONIAL STRUGGLES WITH CULTURE
SHOCK
Business Review Weekly 09/11/1995
Some observers claim that the management is being stretched thin and is distracted from overseeing the traditional businesses, that returns are poor or slow in coming, and that cultural differences remain between the newly acquired bank and the life company. The board is continuing an internal group restructuring to rationalise what Colonial's managing director and chief executive, Peter Smedley, describes as the old constellation of separate companies moving around the holding company. It is replacing these "fiefdoms" with four main business platforms: - -
-------------------
Smedley has made some enemies among former State Bank of NSW managers, who claim he is an "intellectual bully", not acquainted with details of the businesses, and egocentric.
-------------------
Others indicate that Smedley holds sway over the board because senior executives are fearful of his management style, and that he expects profits "on day one" from areas that are being revamped. They also allege cost overruns and declining sales.
---------------------
Some observers suggest that the bank was acquired to cloud a deterioration in Colonial's reserves. Smedley rejects such talk, saying his group still has the strongest reserves of any life company in Australia. However, the group's 1993 accounts reveal a $100-million transfer of reserves from the British operations to Australia, at a time when Colonial's share was slipping in the domestic market.
------------------
Meanwhile, Colonial continues to push into Asian markets; it operates joint ventures in Hong Kong, the Philippines, Singapore, Indonesia, Malaysia, Thailand and China.
Mutual Uncertainty Greets CML's
$1bn Turnaround
Australian Financial Review 03/22/1996
THE revival in bond and equity markets last year has helped Colonial Mutual emerge from the doldrums of red ink with a $726 million profit.
------------------
Although the result is staggering in terms of turnarounds, the continuing lack of a defined set of accounting standards for the life industry means it is still difficult to gauge underlying performance.
Colonial Storms Back Into The
Black
The Age 03/22/1996
Buoyant market conditions and a huge boost in revenues from its State Bank of New South Wales unit fuelled a $1 billion profit turnaround in 1995 by the Colonial Group, Australia's sixth largest financial institution.
--------------
Mr Smedley said. ``The improved performance across the group can be attributed to this innovative and aggressive business re-engineering process and the energy and focus of a strong new management team.''
Colonial sets listing
deadline
The Age 30 Apr 1996
- - - by advising its members the group intended to demutualise before the end of this year.
Colonial In Market Race
Australian Financial Review 05/01/1996
Colonial Mutual has brought forward its timetable for demutualisation, igniting a race with National Mutual
-----------------
It - - - - - proposed to demutualise via a scheme of arrangement, which removes any requirement to offer its members cash instead of shares at the time of listing. The scheme needs Supreme Court approval. - - - - -The restructuring must also receive the backing of the British High Court.
Bank Chief Quits In Surprise
Move
The Age 06/22/1996
- - - State Bank of NSW's head of retail banking, Mr Stuart James, would take over the helm in September. Like Mr Smedley, Mr James is a former Shell Australia executive.
NSW State Bank MD Resigns
Australian Financial Review 06/24/1996
Mr Gerry Van Der Merwe resigned as managing director of the State Bank of NSW after clashes with the board over his reluctance to integrate the bank more closely with its parent, the Colonial insurance group, and because he not been able to "turn the bank around", executives said yesterday.- - - - - the board was becoming increasingly concerned that the "bancassurance" concept was not being implemented successfully by State Bank. - - - - - integration of support functions such as marketing and information technology has not happened at the pace expected by Colonial.
---------------
Mr Van Der Merwe was more intent on refocusing the State Bank, under pressure in the competitive home loan market, rather than integrating it more closely into Colonial's operations, which was a priority for Mr Smedley, sources said."It really boils down to ... setting the organisation up for the future," one executive said. "We don't have the luxury or the time to wait for people. Things have to happen now."
Colonial Incentive Scheme Gives
A New Zest For Life
Business Review Weekly 07/15/1996
An incentive program has kept Colonial Mutual's insurance sales team happy and helped increase revenue as the company underwent a restructuringIncentive programs are a popular tool to motivate and reward employees. - - - - - The introduction of the incentive scheme was one of many changes at Colonial Mutual during 1994 and 1995 when managing director Peter Smedley continued his campaign
----------------------------
As part of the transition, Colonial moved to a franchise system. More than 700 agents and distributors were dropped and the survivors were turned into franchisees.
----------------------------
The move to the franchise system and the closure of the offices were designed to reduce Colonial's operating costs, weed out under-performing agents and distributors, and force the remaining agents (or franchisees) to improve their customer-service skills.
---------------------------
"Growth has been driven by several factors, including the franchise system, new products, a bigger product range, the increased confidence and enthusiasm of our franchisees, and the Colonial Academy incentive program."
----------------------
Colonial hired Carlson Marketing Group in early 1994 to help it create an incentive program to motivate and reward franchisees.
----------------------
It operates like an airline's frequent-flyer program, with points awarded each month for sales, attending seminars and workshops, attending external courses and so on. Franchisees join the scheme as bronze members and progress to silver and gold.
NSW Bank In State Of
Withdrawal
Australian Financial Review 07/25/1996
The State Bank of NSW faces a further shake-up - - - as its insurance parent, the Colonial Group, folds the bank's operations into the group, readying it for demutualisation and listing next year.
------------------------
Mr Smedley is keen to align the image of the two organisations and considers the Colonial brand to be superior in terms of goodwill and recognition to the State Bank brand. He does not see a role for an independent brand or marketing function for the bank.
----------------------
Mr Van Der Merwe was intent on maintaining a separate identity for State Bank, while Mr Smedley was driven by the bancassurance concept, in which Colonial becomes a one-stop shop for savings, investment and insurance products.
New MD Tightens Screws At
State
Australian Financial Review 07/31/1996
Mr Stuart James, the new State Bank of NSW managing director, has warned of further job cuts, and said its parent Colonial Group could seek to escape a promise to the NSW Government requiring it to employ at least 4,320 people until the end of 1997.
-----------------------------
As part of the belt tightening, the bank's executives are leaving the opulent, black marble-clad offices in the top floors of the State Bank building in Sydney to take up cheaper accommodation downstairs.
Colonial Set To Cut The Cost Of
Banking
The Age 08/31/1996
State Bank of New South Wales has reported a $52 million interim profit, but its owner, Colonial Group, has signalled massive cost cuts over the next two years in a drive to increase efficiency.
--------------------
Mr Smedley said this was ``unsustainable'' and cost savings would become management's ``principal target''.
Colonial Primed To Raise War
Chest
The Age 09/13/1996
The group's managing director, Mr Peter Smedley, confirmed yesterday that raising extra equity was "a clear option". - - - - Mr Smedley, - - - said Colonial remained on the lookout for suitable acquisitions
-------------------------
The Age revealed last month that the group was planning to rebadge the bank to identify it clearly as part of Colonial.
---------------------
The group also revealed it was poised to become part of the first wave of foreign life insurance companies to open for business in Vietnam.
Colonial In Mood To Buy
Sydney Morning Herald 09/13/1996
Colonial Group has flagged an extra capital raising to build a war chest for acquisitions when it lists next year.
Colonial demutualising key to
continued growth
The Dominion 10/23/1996
Colonial policyholders will vote next month on whether to change the 123-year-old mutual owned by policyholders to a publicly listed company owned by shareholders.The company must list before December 31, 1998, as a condition of the group's purchase of the State Bank of New South Wales in 1994.
-----------------------
Immediately after demutualisation the company will raise A$350 million (NZ$400 million) through a fully underwritten converting preference share issue - - - - - To ensure growth, the group needed access to capital when required to take advantage of opportunities as they arose, he said.
Colonial Yes Men Take Aim
Australian Financial Review 11/14/1996
Fresh from an overwhelming 97 per cent, four-nation approval for its demutualisation, Colonial group is turning to its next aim - acquisitions.
----------------
- - - - commits the group to the path of a broad-based financial services company, with a strong leaning to both Asia and Europe.- - - - all talked of organic and acquisitive growth for Colonial, the strong under-current of their remarks after the vote concerned takeovers.
Colonial Takes Big Asia Step
The Age 02/07/1997
Colonial Group is poised to double its business in Asia by paying more than $200 million to buy out its joint-venture partner in the region, Jardine Pacific Holdings.
---------------------------
Colonial's Asia Pacific general manager, Mr Alan Beanland, has developed a rapport with the Chinese and is considered by industry analysts to be well-placed to get a licence in the world's biggest potential life insurance market.
Asian Deal Confirmed
The Age 02/15/1997
Colonial Group will raise more than $150 million in new equity at the time of its May listing to fund the buyout of its joint-venture life insurance partner in Asia.
---------------------
Jardine-CMG Life will retain the rights to use the Jardine name for up to three years for a one-off fee of $US2 million. "The Jardine name is especially important in Hong Kong," Mr Smedley said.
Colonial Mutual Plans Asian
Foray
Australian Financial Review 02/17/1997
Colonial Mutual is planning to launch fresh life insurance funds management and banking products in Asia
---------------------
Colonial is also close to bolstering its funds-management and banking-related activities in the United Kingdom
----------------------
"Our Asian strategy is about growing by reinvestment and we will not change this strategy until we meet our critical mass targets in the countries we operate in."
A New Ingredient In Colonial's
Mix
Sunday Age 03/30/1997
PETER SMEDLEY, chief executive officer of Australia's only bancassurer, Colonial Ltd, has just pulled off one of the most daring moves in the financial services industry.
---------------------------
Under its bank franchise plan, Colonial will sell most of its branch businesses as seven-day-a-week retail franchises.
---------------------------
"It is radical if you think about banking, but it's not radical if you think about retailing," Mr Smedley says of the scheme, which has not raised any objections from the Reserve Bank.
----------------------------
The group, which dropped its cumbersome old title in favor of Colonial, replaced its life agency sales force with a franchise system in 1994. - - - - - - Colonial is hoping to reap a similar sales surge from its decision to adopt this strategy with the bank.
Plans Give 4.6pc Of ColMut To
Staff
Australian Financial Review 04/07/1997
Senior executives and staff at Colonial Mutual could emerge with as much as 4.6 per cent of the company following its listing on the Australian Stock Exchange under the terms of three separate employee share schemes.
------------------
- - - - Mr Peter Smedley, committed to a five-year contract with the bancassurance group last December that would entitle him to remuneration of $988,000 per annum.
------------------------
The pricing, and the group's decision not to seek core investors ahead of the float, have sparked renewed speculation the group could be a takeover target after it lists on May 19, particularly given that it will have a very open share register.
---------------------------
Meanwhile, Mr Smedley will also be the biggest recipient in the senior executive share option plan that will entitle 45 from management to acquire options at 1cents each, convertible into ordinary shares at the listing price.
---------------------------
Colonial has also set aside 3.5 million shares for employees
Colonial Reopens Public
Offer
The Age 05/03/1997
The banking and insurance group Colonial has capitulated to pressure from the Australian Securities Commission and reopened its public share offering -days after closing the $1.6 billion float prematurely. - - - - Many are expected to be allotted less than the minimum application of 1000 shares. - - - - we must warn investors that the public offer is already heavily oversubscribed."
Colonial Shares May Fall To 300
Per Person
Australian Financial Review 05/05/1997
Given the huge demand, Colonial is expected to price the float at well above the $2.60 offer price to retail investors, which would value the company on listing at $1.51 billion.
Employees Preferred For Colonial
Franchises
Australian Financial Review 05/08/1997
The new franchises planned by the Colonial State Bank would be offered to Colonial's existing employees and franchisees in preference to outsiders, the managing director of Colonial Ltd, Mr Peter Smedley, said yesterday.
-------------------------
Mr Smedley said the bank would not finance franchisees, even those sourced internally. "They will have to either put the capital up, have third party funding or a letter of credit from another institution." He said he was very optimistic about the future of bank franchising. "McDonald's did it very well," he quipped.
Colonial Tips 50c Premium
Sydney Morning Herald 05/19/1997
Colonial Group will hit the boards running today , with the largest number of shareholders of any Australian company expected to reap the rewards of a massive stag profit.
Colonial's Execs Awash In $13m
Float Profit
Sydney Morning Herald 05/22/1997
Colonial's stunning sharemarket debut has delivered windfall profits to its investors but none more so than an elite band of executives, led by chief Mr Peter Smedley, who share an option pool already almost $13 million in profit. Mr Smedley was sitting on a $2.5 million paper profit - - - - - Colonial's non-executive directors also are big winners, thanks to generous allocations of stock.
--------------------------
"I personally think it's excessive," said one analyst.Australian Shareholders' Association said the performance hurdles attached to the option plan were too modest.
Colonial Hit Over 'shares For
The Boys' Deal
Sydney Morning Herald 05/26/1997
Institutions and shareholder lobby groups have criticised the large amounts of stock bought by Colonial's board members and senior management when outside retail investors got tiny parcels in the banking and insurance group's recent float
--------------------------
"Shareholders have a reasonable argument to say they were disadvantaged," said Mr Peters.
-------------------------
Fund managers were critical of the share allocations to executives. "Its ultra generous," said an institutional shareholder in Colonial, who requested anonymity.
-----------------
"You can question the moral ethics of the way the whole thing has been run."
Colonial Strategy Proving A
Winner
The Age 08/15/1997
COLONIAL continues to defy the sceptics. There are, or at least were, plenty of people prepared to question the dizzying pace of change within Colonial over the past five years, and even more prepared to query the nature of that change. - - - - is not just coping with the radical change in its structure and orientation but thriving on it.
-------------------------
- - - - - the striking aspect of the results is that combination of startling growth rates and impressive cost reductions.
-----------------------
So, right across the group, in Australasia, the UK and Asia, Colonial is generating superior growth rates and profitable growth. Five years ago, before Peter Smedley arrived from Shell and turned the place inside out, Colonial was dying a quiet and slow death.
Colonial Well On The Way To
Full-year Goal
Sydney Morning Herald 08/15/1997
Colonial delivered a strong maiden half-year profit of $118 million yesterday, bolstered by heavy cost-cutting in the State Bank and improved earnings across all divisions.
----------------------------
Mr Smedley said the Colonial group's cost-to-income ratio had fallen substantially in the half, to 66.4 per cent from 74.1 in the same period last year, but declined to quantify the total costs cut from the business.
Colonial Directors Bucketed
Australian Financial Review 08/29/1997
Angry shareholders took to the floor of Colonial Ltd's inaugural annual general meeting yesterday to complain about their reduced share allocations and accuse directors of looking after their own interests in the oversubscribed Colonial float last May.Shareholders demanded to know why they were left out in the cold while the "directors and broking firms attached to members of the board" were looked after.
Colonial Joins $140m Venture
Into China
Sydney Morning Herald 09/17/1997
Colonial has accelerated its bid to become a major player in the lucrative Chinese insurance industry by teaming up in a $US100 million ($140 million) investment there.
-------------------------
Colonial and NZ-based Mahon & Associates have formed a joint venture to raise $US100 million to invest in mainly government-owned Chinese businesses.
Colonial Picks 60
Franchisees
Sydney Morning Herald 11/06/1997
Twenty of the operators have not been previously involved with the bank and were picked from 1,350 applications, the chief executive officer of Colonial, Mr Peter Smedley, said - - - It is the first time that an Australian bank has franchised outlets.
Colonial Bounces Back To $4
Sydney Morning Herald 11/25/1997
Investors have renewed their love affair with Colonial.The company's shares had been sold down heavily on concerns about its exposure to Asia and sharemarket volatility which might hurt profits. They had traded below $4 for several weeks until yesterday, - -
-----------------------
"Our conservative takeover valuation price is $5.44," the County report stated.
------------------------
However, some of the steam has been taken out of the takeover rumours, particularly after the AMP took a strategic stake in National Mutual.
Colonial Surges On $227m First
Result
The Age 03/05/1998
Colonial shares surged to a new high of $4.65 yesterday after the company unveiled a maiden full-year profit of $227 million - smashing the prospectus forecast by 26 per cent.
------------------
Colonial's radical allfinanz strategy - its "one-stop" financial services program - resulted in cost savings of $96 million.
Stunning Debut By Colonial
Illawarra Mercury 03/05/1998
Colonial doing for banking what
Harvey did for retail
Sydney Morning Herald 28 Mar 1998
Harvey has shown there is a fortune to be made if you can organise a large retail furniture and appliance business through a series of franchises
Insurance Chief Takes Top Salary
Spot With $1.35m
Sydney Morning Herald 04/01/1998
Colonial's chief executive, Mr Peter Smedley, has earned a further $180,000, taking his salary to $1.35 million, as a reward for almost doubling the banking and insurance group's profit last year.
------------------
He is actually worth more than $16 million, if his three million in company options are taken into account.
---------------------------
Colonial executives have been issued 15.76 million options worth in total about $78 million.
Colonial Has Huge Win In
China
Australian Financial Review 04/18/1998
Colonial Group has scored a massive coup by becoming the first Australian insurer to win a licence in China.
---------------
- - - Colonial's vulnerability to a takeover becoming issues in determining which company was more eligible.
---------------------------
Colonial Group has beaten off a strong challenge from National Mutual Holdings to become the first Australian insurer to win a licence in China.
World Is Oyster For Colonial's
Top Boy
Herald Sun 2 May 1998
Abstract -- Australasian Business IntelligenceProfile of Peter Smedley - - - - It is suggested that Smedley could have been a general instead of a chief executive. He attended the Australian Military College at Duntroon but had no regrets about leaving the Army.
Colonial Chief Learnt Trade By
Selling Oil
The West Australian 05/11/1998
And Peter Smedley's ascent to the top job at Colonial might seem even stranger when you realise he spent more than 20 years at the oil giant and played a part in the 1975 revolution that saw self-service petrol stations become the norm in Australia.But Mr Smedley sees a great similarity between the function of a chief of a financial group and working as a senior manager of an oil company
----------------------
Mr Smedley removed or oversaw the departure of all but 10 of the top 200 people in Colonial Mutual in his first year - - - - .
-----------------------------
He now has a team of senior executives that includes several recruits from Shell, who recognise that the banking and funds management are also low margin, high volume businesses.Colonial State Bank has a Shell hallmark - a national franchise network - -
--------------------
A crucial part of the Smedley philosophy - with greater links to the petrol industry rather than the old school of big life offices - is that the retail distribution should be readily accessible.
----------------
He (Smedley) said Colonial had created an Allfinanz group where customers could get access to all its services by visiting one shop.
Colonial Picks Up Legal &
General
The Age 05/28/1998
Colonial yesterday blitzed its rivals, simultaneously placing the winning bid for Legal & General and ensuring it was cashed up for further acquisitions.
-------------------------
Analysts said Colonial had paid "a big price" ($892 million) for Legal & General and speculated that Legal & General's funds management division could be the first to suffer job losses from Colonial's planned cost cuts.
---------------------------
Initially, analysts were puzzled by Colonial's decision not to fund at least part of purchase with debt.
Colonial Reveals Wider UK
Ambitions
Australian Financial Review 05/29/1998
Colonial Group has set its sights on spending up to GBP600 million ($1.58 billion) on an acquisition in Britain, just days after sealing its $892 million takeover of Legal & General's Australian business.
--------------------------
"Put simply, there is no future in the UK business if it doesn't grow," the source said."You either get bigger or get out - and getting out is something Peter doesn't like doing."
Colonial On The Prowl
The Age 08/12/1998
He said the UK was a "prime" market for the group, and reaffirmed plans to double Colonial's UK operations in the next five years.
--------------------------
Asia, too, is a possibility, with Mr Smedley nominating opportunities in Thailand, Malaysia and Indonesia.
Colonial May Have Eye On Pru
Sydney Morning Herald 08/15/1998
Colonial is believed to be shaping up for another big acquisition with the Australian operations of the UK-based life company Prudential said to be topping its shopping list.
------------------------
"If it's Colonial, the purchase will really stretch them. They'll probably have to do another capital raising," one analyst said. "The market will really slam them hard".
Acquisitive Colonial Snaps Up
$1.6bn Of Prudential
Australian Financial Review 08/17/1998
Colonial Ltd will announce today a $1.6 billion takeover of the Australian and New Zealand operations of Prudential Corporation plc, catapulting the Melbourne-based group into the first division of financial services on both sides of the Tasman
----------------
The acquisition, which will be funded largely off the group's balance sheet - - - -
----------------------
Colonial has flagged an almost unlimited appetite for acquisitions, with teams also looking for suitable targets in both South-East Asia and the United Kingdom.
Colonial Prowls For More
Deals
Australian Financial Review 08/18/1998
Listed bancassurance group Colonial Ltd has flagged further capital raisings to fund its aggressive expansion plans after launching a second major acquisition in Australia in less than three months. - - - Colonial yesterday confirmed it would purchase Prudential Corporation of Australia Ltd - - .
-------------------
Mr Peter Smedley, said yesterday that Colonial belived it could reap $100 million of cost savings from the merged organisations by June 2001, - - .
--------------------
Mr Smedley said an acquisition strategy was "the fastest and best means of achieving the efficiencies that arise from increased scale and business synergies, resulting in substantial benefits for shareholders and customers".
Smedley Takes On The Big
League
Australian Financial Review 08/18/1998
Colonial chief Peter Smedley has driven a Mack truck through the increasingly cautious Australian investment industry on a $2.2 billion, three-month spending spree which has put the once struggling insurance group into the big league.
-------------------
Smedley has shown an extraordinarily single-minded determination to create an allfinanz empire worth a shade under $6 billion, with the scale to offer competitive product and an increasingly strong brand image. - - - - - - - Step one is to get the costs down.
----------------------
While he won't rule out further acquisitions, Smedley has probably tested the stockmarket's limits in terms of new equity raisings.
---------------------------
Colonial has long been at the top of most bank takeover lists. While any takeover would now be more costly after adding Prudential to its fold, Smedley has made the company an even more prized asset for an acquisitive bank
Colonial Reshuffles Its Top
Deck
Australian Financial Review 09/22/1998
Colonial Ltd's managing director Mr Peter Smedley has rejigged his senior management team, - - - -. The big winner from the reshuffle is Mr Smedley's former Shell Australia colleague, Mr Rob Garnsworthy, who becomes head of the IFS business unit after a successful stint managing Colonial UK.
Colonial Prepares To Shed
200
Australian Financial Review 09/24/1998
Colonial Ltd is poised to axe up to 200 administration and call centre positions in Melbourne as part of a program to consolidate its life insurance operations following the purchase of Prudential and Legal & General.
------------------
"We never publicly discuss retrenchment details," Mr Morgan said."Inevitably, with the integration of L&G, Prudential and Colonial there will be some job losses.
Pac-man's Digestion Problem
Australian Financial Review 10/10/1998
To make his voracious acquisition strategy work, Colonial boss Peter Smedley - aka Pac-man - needs to sell a lot of financial products to each of his customers. Privately, some analysts are starting to wonder whether the plan is too ambitious.
-------------------
The polite way is to wait for a rival to flag that it is for sale and to then enter into negotiations, more often than not bidding against several of your competitors. The other way is to go knocking on doors on the off-chance your rival is thinking about waving the white flag. The latter game plan is one that clearly appeals to Colonial chief executive Peter Smedley, - - - - It's a badge of honour for Smedley that not one of his competitors knew Prudential was for sale.
-----------------------
Smedley has grown Colonial from a $13 billion lame duck to a $65 billion big-game hunter. - - - - - - Smedley's aggressive stance on takeovers has made him one of the darlings of the sharemarket.
-----------------------
The name of the game for Smedley, and indeed most of his rivals in the financial sector, is size. As highlighted by the Wallis report, Australia's financial industry is inefficient by world standards because it has far too many players chasing too few dollars. Most of the players simply lack scale.
-----------------------------
That quantum leap in market share was a feat. But it won't deliver much added value for Colonial shareholders unless the company can dramatically lower the cost of servicing each customer and sell more products to each.
------------------------------
Whether Colonial meets the cost target depends on the ability of Legal & General's Life 400 computer system (developed by American software giant CSC). Eventually, all of the existing Colonial and Prudential business will be shifted over to the new L&G system, installed recently at a cost of around $50 million. If the system delivers, Colonial will have a big pricing edge.That's because many of the products now sold by the group are so-called box products. A customer who comes to Colonial seeking a low-start home loan is offered a box that gives them the loan plus home insurance, a gold mastercard, a savings account and a disability insurance policy.
--------------------------
The aim of the game is to own the customer, rather than be a provider of a commodity-type service where the customer can switch at a whim.
------------------
But not everyone is enamoured of the Colonial style, and many have qualms about Smedley's ability to implement his "allfinanz" strategy - the concept of selling banking, insurance and investment products through a single distribution system.
Daring Or Dangerous?
Business Review Weekly 10/26/1998
Peter Smedley has rapidly taken Colonial into the big league. Now he is planning a merger with a British financial services group.It might be a surprise to many who have watched Peter Smedley ruthlessly restructuring the Colonial group to know that he was once removed from a venerable institution. After less than two years at Duntroon, the military training college in Canberra, he was, in the words of army archivist Ross Howarth, "terminated ... it means he was sacked, the army asked him to leave".
---------------------------
Today, half of Colonial's profit comes from a bank that cost it only $576 million. It was simply one of the best takeover deals ever made by an executive in the Australian financial services market.
--------------------
Last year Colonial launched its Home Pack Box, a true allfinanz package in which a home loan, general insurance and life insurance are offered. This style of packaging is set to boost Colonial's all-important cross-sell figure, currently 20% (the percentage of customers holding more than one product). Smedley has set a target of 50% by the end of next year.
------------------------
This 'very big job' will be carried out by a very big computer system, the Life 400 system which is seen as state-of-the-art within financial services. What is more, it is expected to be a key element of Smedley's plan to strip $150 million from operating costs at Legal and General and Prudential in the next two years.
---------------------------
Smedley's name is synonymous with the "new Colonial", and he rules with a grip of iron. He says he likes senior executives with the courage to say "no", but even the most obvious of media questions are given short shrift.
---------------------------
Smedley is a complex package. His detractors will not go on record but they are out there, and several leading figures in the market simply will not buy his allfinanz concept. On the other hand, those in whom he has inspired loyalty are lavish in their praise. Michael Schildberger, the former broadcaster who has become the public face of Colonial through a long running advertising campaign, says: "You don't see a visionary come along every day, but I believe you have one in Peter."
-------------------------
We are now in our second five-year plan ... it has just started. Two key features of that plan will be achieving critical mass and building in Asia.
-------------------------
Smedley's enthusiasm for Asia is based on the high-level contact with Asian leaders provided by former Prime Minister Paul Keating. Smedley and Keating regularly travel together in Asia, especially China,
-----------------------
The ratings agency Standard and Poor's put Colonial on a credit-watch negative after its Prudential acquisition last month. The implication is that Smedley, for the moment, may have pushed the market to its limit, but he brushes aside those fears. "If we managed our business on the basis of what ratings agencies say, we would be stopping and starting all the time."
-----------------------------
He has been married since he was 21 to Christine (nee Kestler) and they have five children. He went to Aquinas College in Perth with "the bloody Micks" - as Christian Brothers students were then commonly known - and fellow alumni include Olympic miler Herb Elliott and the Chaney brothers Fred (Liberal Party) and Michael (Wesfarmers).Michael Perrott of Perrott Management Services was a schoolmate and fellow member of the Aquinas cricket firsts. "I remember Smeds as a real go-getter," he says. "He had a shock of red hair and was a left-handed batsman. He was very competitive even then."
----------------------
His leadership skills were immediately called upon and he completed an MBA. He moved around the company, working in coal, gold and oil, and eventually found his metier in Melbourne in the "downstream oil products" division, where he rose to become executive director. He is a great fan of the Carlton Australian rules football club and, when the chance presents itself, he and his family spend time on Port Phillip Bay at Sorrento, where they have a property. As Smedley earned more responsibility under his mentor Sir Leslie Froggatt, he did two spells in London.A former Shell executive says Smedley is the most ambitious man he has met. However, after nearly three decades with the group, the top job eluded Smedley - Ric Charlton getting the nod instead.
Colonial Boys Divvy Up Another
$2m From Options
Sydney Morning Herald 01/07/1999
Senior management at Colonial yesterday picked up 4 million options as part of the company's senior executive share option plan, which delivered an immediate paper profit of close to $2 million
Colonial Rises To Conquer
Australian Financial Review 03/04/1999
Colonial Ltd's acquisition-hungry managing director, Mr Peter Smedley, yesterday signalled that last year's deals were already digested and he was ready to launch into a fresh shopping spreeThe Melbourne-based allfinanz group reported a 35 per cent increase in net profit to $306 million for 1998, with analysts expressing some surprise that the group had integrated three major acquisitions worth more than $2 billion without missing a beat.
-----------------
Strong new business growth - particularly from cross-selling across its allfinanz product range - and a continued focus on harvesting cost efficiencies from the acquisitions were the key drivers.
Seems Smedley And Co Have Come
Through Again
The Age 03/04/1999
Beyond the simple economics of size, however, is Colonial's unique allfinanz strategy, under which it is pursuing the concept - increasingly the reality - of selling banking, insurance and funds management off the same management and technology platforms, through the same multi-channel distribution network and to the same customer base.
---------------
The acquisitions added a vast new customer base to Colonial's existing business and therefore the potential, not just to reduce costs, but to cross-sell products, including Colonial's banking products.
-----------------
Colonial is as aware as anyone that the endgame in the rationalisation of the domestic financial services sector is now being played out.The conviction that, if it were to be a serious player when the dust settled it had to be an aggressor not a bystander, led to last year's $2.25 billion acquisition spree.
-------------------------
Colonial, however, desperately wanted not just L&G's first-rate insurance and funds management operations and people, but also its state-of-the-art and Y2K-compliant technology platform.
--------------------------
The great strength of Smedley's seven years at the helm of Colonial is, however, that the group has publicly set demanding objectives and consistently, and substantially, outperformed them.
---------------------------
Smedley and his team are, at this stage, again delivering on their promises.
Buying Binge Sees 35pc Lift
Sydney Morning Herald 03/04/1999
Colonial's aggressive acquisition drive and cost-cutting prowess yesterday propelled the group to a better-than-expected full-year profit of $306 million.
--------------------------
"The group is efficiently unlocking the benefits of scale," Mr Smedley said, predicting $150 million in annualised cost savings by 2001.
Colonial plans more buys but not
in New Zealand
National Business Review 03/04/1999
Mr Smedley repeated his longstanding crusade about cost-cutting, claiming success on all fronts,
Colonial Shareholders To Rule On
Option Bonanza
Australian Financial Review 03/24/1999
Colonial Ltd's managing director, Mr Peter Smedley, is set to harvest a further 750,000 options if shareholders vote in favour of the issue at the group's annual meeting next month.
Colonial Signs Up For Viet
Venture
Sydney Morning Herald 1 Apr 1999
ABIX (Australasian news abstracts)
Colonial plans to form a joint venture with Vietnam's second largest life insurer, Bao Minh.
Aust Colonial execs say no fear
of impending takeover
AAP News 04/27/1999
Colonial Ltd chairman David Adam today said the company is not in fear of an impending takeover.
Colonial, China Life to form
joint venture in Shanghai
AAP News 07/30/1999
Financial services giant Colonial Ltd and China Life Insurance Company have agreed to form a joint venture company in Shanghai.
Colonial looking for
acquisitions, UK favoured target
AAP News 08/10/1999
Smedley Not The Type To Relax,
So Watch This Space
The Age 08/11/1999
Last year's $2.3 billion acquisition spree is proving more successful than anyone outside Colonial could have anticipated.
--------------------------
The outcome was clear in both the bottom line to Colonial's performance and its detail - Colonial executed the integration of the two new businesses with its own pre-existing insurance and funds management operations extraordinarily efficiently.
Colonial Roars To $199m
Profit
The Age 08/11/1999
Colonial's share price leapt 7 per cent yesterday, as aggressive cost-cutting and acquisitions propelled the group's interim profit to a bumper $199 million after preference share dividends. - - - the 58 per cent profit increase vindicated Colonial's business diversification and acquisition drive.
-----------------------
Expense control was impressive, with Colonial achieving its $150million annualised cost savings two years early following a $60million saving in the June-half.
-------------------------
Analysts said time was running out on Colonial's bid to become a viable British competitor, as Mr Smedley's five-year plan to double the business there by acquisition was already three years down the track.
Colonial Raises The Stakes
The Age 10/12/1999
Colonial is once again poised to hit the takeover trail after yesterday revealing an $800 million capital raising that will boost the acquisitive group's purchasing power
---------------------
Analysts said they were comfortable with the $800million capital raising: without it, Colonial would be stretched in an acquisition.
Colonial moves to snap up Trust
Bank of Tasmania
AAP News 11/16/1999
Financial services group Colonial Ltd has moved to snap up Tasmania's regional Trust Bank for $149.1 million, securing a foothold in the southern state's banking market and a springboard for expansion.
Colonial Snaps Up Trust Bank At
$149m
The Age 11/17/1999
- - - - the bank will be rebadged Colonial Trust Bank and integrated into Colonial within 12 months.
---------------------------
Some of Trust Bank's 520-strong workforce will disappear as Colonial cuts duplication in areas such as treasury and information technology to meet a $20million target to cut expenses across its Australian banking business by December 2000.
Colonial: A Predator In Bigger
Predators' Sights
Australian Financial Review 12/18/1999
For most of that time, Colonial has also been the subject of ongoing speculation that it was an alluring target for the big banks, including the Commonwealth Bank of Australia.That speculation resurfaced this week with the release of several analyst reports suggesting that CBA and others might be preparing to mount takeover bids for the country's second-largest life company.
Smedley cashed up and hungry
Australian Financial Review 02 Feb 2000
Colonial boss Peter ``Pacman" Smedley is reportedly close to receiving $1 billion from the sale of his UK assets,
Colonial Has $183m Fling In
Scotland
Australian Financial Review 02/19/2000
Colonial Limited has beefed up its presence in the United Kingdom-managed funds industry, with the $183.2 million acquisition of Scottish fund manager Stewart Ivory.The surprise purchase comes amid talks between Colonial and several potential buyers for its UK life insurance, pensions and lending arms.
---------------------------
Last year Colonial moved its First State international equities team to London and acquired the UK and Asian operations of fund manager Nicholas Applegate.
Smedley Stonewalls
Australian Financial Review 03/02/2000
Peter Smedley did nothing yesterday to dispel expectations that Colonial is in the queue to buy BankWest.
------------------
Smedley told a press conference in Melbourne that he could envisage a scenario where one of the big four could still take over Colonial post ownership of BankWest without the need to make any significant divestiture.It is a view that would certainly be put to the test by Allan Fels who is already briefing his commissioners about the inevitable bid for Colonial.
The expectation of a takeover has underpinned the stellar share price performance of Colonial over the past year.
Shake-out Talk Dogs Colonial
Australian Financial Review 03/02/2000
Colonial Ltd yesterday surprised the sharemarket with a strong $455 million annual net profit, possibly setting itself up for a takeover bid for Bank of Western Australia in the next fortnight.
-------------------
- - - - raising speculation that one of the four major banks is preparing its own move on Colonial, aware that a bid by Mr Smedley would effectively rule his bank out of a second-tier shake-out. - - -- - the Australian Competition and Consumer Commission would veto a major bank move on a combined Colonial-BankWest operation.
Colonial Shapes Up As A
Target
Australian Financial Review 03/02/2000
It is also not the only asset Smedley is looking at right now, but the fact that Bank of Scotland is reviewing options has set the clock ticking on any move by Colonial and also on any bid for the Pacman's company.While Smedley may be keen to get some takeover premium back into the stock, the issue then is just who would pay the $8 to $10 a share or $7.5 billion to $9 billion necessary to snap up the Pacman.
Why Peter Smedley Is The Big
Banks' Nightmare
Australian Financial Review 03/04/2000
The Big Four banks must wish they had taken out Colonial years ago. They didn't and now Colonial is taking them on.
---------------------
The survival of Colonial, and its transformation from a sleepy life insurance loser into a financial services giant under Smedley's guidance, has made life far more difficult than it would otherwise be for the big banks.
----------------------
In such an environment of consumer unrest, there is a great opportunity for a challenger brand to steal customers away from the established oligopoly.
-----------------------
However, should Colonial manage to acquire BankWest, it would have a major banking footprint in NSW, Tasmania and Western Australia, with small operations in Victoria and Queensland. It would thus have half a national branch network and, because of that, a compelling reason to complete the jigsaw by acquiring regional banks in Victoria and Queensland.
-------------------
Smedley is clearly the most aggressive acquirer of financial services companies in this part of the world. His "Pacman'' nickname is due to his having completed 11 significant acquisitions, worth a total of $3.5 billion, since December 1994.
--------------------
However, if Colonial were able to amass a national bank branch network, Smedley's ability to cross-sell products would increase dramatically.
--------------------
While Smedley may be forced to pay top dollar for BankWest, on the evidence to date he's well placed to make such an acquisition pay.
------------------------
In all takeovers the real challenge is to obtain cost savings and synergies as quickly as possible. Past experience has shown that mergers that don't result in big savings in the first year rarely work.
CBA In $9bn Grab For
Colonial
Australian Financial Review03/08/2000
Commonwealth Bank is set to unveil a$9 billion friendly takeover offer for Colonial Ltd within the next two days, creating the country's largest financial services company.
--------------------
Commonwealth Bank is expected to offer Colonial shareholders between $8.50 and $9 a share in a scrip-for-scrip deal
--------------------
Colonial's shares have soared from the $2.60 listing price after demutualising in April 1997 to yesterday's last sale of $6.75 before it sought a suspension pending a major announcement.
--------------------
Under the deal, Colonial chief executive Mr Peter Smedley will leave organisation that he has formed into Australia's only true allfinanz group almost $20 million richer, cashing out his 3 million options.
-------------------
Insiders have not yet ruled out a rival bid by NAB, but the foreign banks are believed to have pulled out.
-------------------
Greater urgency was triggered by Colonial's decision to buy the Bank of Western Australia.
Battle Will Be Worth
Watching
Sydney Morning Herald 03/08/2000
Within the next 48 hours the Commonwealth Bank will put almost $8.5 billion on the table for banking and insurance group Colonial. That equates to $9 per share and will represent the biggest takeover in Australian history.
----------------------
It is understood Smedley was initially keen to take the job of chief executive, but David Murray will be running the combined operation if the bid is successful. - - - Smedley will - - - will retire, aged 57, with near $30 million.
Are You Being Served?
Sydney Morning Herald 03/09/2000
Will bigger banks mean better service or simply bigger bastards?THE game plan for the country's biggest banks is simple. More market share means more revenue. And that means bigger profits. That's the logic behind the Commonwealth Bank's impending $8 billion bid for Colonial.
------------------
That has all changed now. In the high-octane environment of competition, the spoils go to the rich. No longer protected by regulation, the banks feel no obligation to the community at large. Banking now is a business, not a social service.
---------------------
But community anger at the banks has been fuelled by the enormous profits earned in recent years and the huge salaries drawn by many of the industry's senior executives.
How Smedley Was Forced To Roll
Over
Australian Financial Review 03/11/2000
Peter Smedley had wanted to keep Colonial independent. What made him change his mind?
----------------
Smedley argued to the board that while bid discussions should be actively pursued, the opening CBA bid price undervalued Colonial, and that he could deliver superior returns for shareholders
---------------
Smedley's growth scenario for Colonial involved the BankWest takeover early in 2000, a number of smaller acquisitions offshore, and then a blockbuster takeover bid for ANZ Banking Group in 2001.While Smedley has many admirers on the Colonial board, his appeal to keep open the independence option did not win applause.
---------------------
Even the fiercely independent Smedley had come to the view that the merger would produce much better results for shareholders, in the medium term, than slugging on alone. The board resolution to accept the CBA merger terms was approved unanimously.
Smedley Ensures His Bank Goes
Out In Style
The Age 03/11/2000
The Colonial Bank CEO, Peter Smedley, has always seemed to know a thing or two about when to attack and when to withdraw with honor - or, as happened yesterday, with almost $19million in his pocket.
---------------
As a young man he briefly flirted with a career in the army at Duntroon, where he learnt about military strategy and how to become a more formidable opponent.
--------------
``Colonial has pioneered the allfinanz approach to financial services in Australia, achieving the highest cross-sell ratios of any Australian financial institution,'' he said.Talk to those who do business with him, and they'll tell you he's formidable, aggressive, yet very focused.
Bankers stung by Pac-Man's
buying game
New Zealand Herald 03/13/2000
$14m Windfall Leaves Smedley
Second To One
Australian Financial Review 03/28/2000
Colonial chief executive Mr Peter Smedley is set to reap a windfall profit of around $14 million as a result of Commonwealth Bank's takeover bid.
-----------------
According to the company annual report issued yesterday, Mr Smedley collected an extra $486,000 in 1999, taking his remuneration package to $1.91 million.
Colonial Execs To Carry Off Tidy
Sum
The Age 04/14/2000
Colonial banking and insurance group chief executive Peter Smedley will receive a life pension of $837,333 a year after his services are terminated when the $9 billion merger with Commonwealth Bank is completed in June.
Colonial Top Gun To Head
OneSteel
The Age 06/06/2000
BHP is set to install one of Australia's most highly paid executives, outgoing Colonial managing director Peter Smedley, as non-executive chairman of its soon-to-be-floated long-products steel division.
Peter Smedley declines board
position with Commonwealth
AAP News 06/13/2000
"I want to ensure that I am in a position to take on another role as chief executive should a suitable opportunity arise," he said in a statement.
CEOs keep watch as 'Pacman'
Smedley on the loose
The Age 14 Jun 2000
Chief executives of any large but underperforming companies based in Melbourne should look over their shoulders
Smedley Wants To Be Boss,
Again
Australian Financial Review 06/15/2000
But no-nonsense Mr Smedley, 57, is believed to have been unhappy about some aspects of the CBA-Colonial merger plan.
------------------
But this abrasive style and his huge success at Colonial has made Mr Smedley a much sought-after candidate by troubled companies that needed a tough, hands-on chief executive to turn them around. And it is believed he has already accepted a high-profile position with a Melbourne-based company.
Smedley loose: CEOs are feeling
the heat
Australian Financial Review 17 Jun 2000
MAYNE NICKLESS LIMITED: Director
Appointment/Resignation
Australian Stock Exchange Company Announcements
06/26/2000
Mayne Nickless Ltd announced today that Mr Bob Dalziel had advised the Board of his decision to step down as Managing Director, effective 31 July 2000.
-------------------
Mr Peter Smedley has accepted the Board's invitation to lead the Group forward as Mr Dalziel's successor.
Australia Hot Stock: Mayne
Nickless +5.2% On New CEO
Dow Jones Australia and New Zealand Report 06/26/2000
Shares in Mayne Nickless Ltd. (MAYNY), an Australian healthcare and logistics company, are up 5.2% in early trading Tuesday on continued positive sentiment following the appointment of Peter Smedley as chief executive.
Smedley Takes On Ailing Mayne
Nickless
Australian Financial Review 06/27/2000
Former Colonial Group chief executive Mr Peter Smedley is expected to make widespread changes to Mayne Nickless' management and structure after being installed to turn around the ailing health-care and logistics conglomerate.
-----------------
Mayne Nickless shares soared 33cents or 11 per cent to $3.27, adding more than $115 million to Mayne Nickless' market capitalisation.
Mayne Gives Pacman Something To
Chew On
Australian Financial Review 06/27/2000
What would possess a middle-aged executive with $20 million from shares and options in his pocket and a lifetime annual superannuation payout of $837,000 to plunge deep into one of the trouble spots of the corporate sector?
-----------------------
``He's a workaholic ... he's no tourist or golfer,'' said a former Colonial colleague. ``He's a worker for whom following something through gives the greatest satisfaction.''
-----------------------
Mr Smedley is expected to ascertain quickly whether Mayne Nickless should keep its logistics and hospital assets under the one roof. His decision could herald the break-up of yet another Australian business conglomerate after CSR, Boral and Pacific Dunlop.
-------------------------
While Mr Smedley has no experience running a business like Mayne Nickless, his working life has been spent in low-margin, high-volume businesses, with specific problems in distribution, and he's no stranger to taking on a basket case.
---------------------------
It could well be a case of ``go well, go Mayne Nickless'', as the new chief executive is expected to reassemble an executive coterie group that stretches back to his formative years at Shell Australia. Already, Mayne Nickless has hired former Colonial financial services chief Mr Stuart James to a senior executive role.
-------------------
" - - - That's been a key part of his success and I would expect that he would bring some of those people with him at some stage,'' a close colleague said.
Different Ball Game For
Smedley
Australian Financial Review 06/27/2000
The ``Pacman'' exploited these benefits better than most, but his managerial talents at Mayne Nickless will be tested against a whole new benchmark, starting with the chronic, inherent structural problems in the health-care sector.
---------------------
In hospitals, where capital spending sector-wide has virtually stopped, rationalisation beckons; and in both, time is of the essence.
--------------------
After clocking up some $580.6 million in abnormal losses in the six years ended June 1988, the portfolio doesn't look too pretty
--------------------
The bullish case for hospitals says the trend is up, with the Federal Government pumping $1.7 billion a year into the health-fund industry, - - - - - the health fund sector is now back in the black. Trouble is the private hospitals are not enjoying the benefits because they don't own the customer; the doctors and health funds do.
-------------------
Both the trouble and opportunity for Smedley is that capital expenditure in the whole sector is grinding to a halt precisely because of the low capital returns and poor cash flow.In other words, the whole sector is ripe for rationalisation and this is a card Smedley knows how to play.
Pacman May Quell Appetite At
Mayne
The Age 06/27/2000
But it may not make sense for him to reapply the formula he famously used to revive the Colonial group.
------------------------
- - - the transport group was moving away from its roots into private hospitals and pathology.But Mr Smedley might cause as much disquiet as excitement if he takes Mayne further down that rocky path. There about 25,000 private hospital beds in Australia, but only about 8000 are owned by profit-driven enterprises, and Mayne already owns about three quarters of them.
The fees it receives are effectively controlled by the health funds, and it is competing with untaxed religious and charitable groups, which own 17,000 private beds. It is a tough business, as is pathology in which Mayne has arguably paid too much for its market share.
----------------------
If he chooses to expand in health, there will be queries. ``Can Mayne ever achieve a return above your cost of capital in the health business? On the evidence so far, that is far from certain,'' said one analyst.
Smedley To The Rescue
The Age 06/27/2000
Mayne Nickless has hired Colonial's ``dynamic duo'', Mr Peter Smedley and Mr Stuart James, in a package deal to shore up the health-care and logistics company's flagging fortunes.The announcement provided an immediate 14 per cent kick in the Mayne Nickless share price to $3.35. - - - - Mr Smedley is a hero of the investment community.
--------------------
A former colleague of the Colonial men described them as ``the Intellect and the Implementer'', saying they had worked well as a team in that environment.
------------------
Mr Smedley faces a formidable task to restore the fortunes of Mayne - - - investors still have doubts about where the growth dynamic will come from. - - - - its low returns from the millions ploughed into private hospital ownership have worried many.
`Pac-man' Called To Firm's
Rescue
Newcastle Herald06/27/2000
Mr Smedley is expected to put the broom through the company which last month downgraded full-year profit forecasts, - - -
-----------------
Austock Brokers research director David Perry said Mr Smedley was expected to maintain his `Pac-man' reputation, gained through a vigorous acquisition campaign at Colonial.
Hearty welcome endorses Pacman's
game
The Australian 27 June 2000
Less than an hour later - - announcement that Peter Smedley was to run the company, the shares jumped 14 percent - - .
-------------------
The market for more than a year has been begging for a leader prepared to take the tough decisions.
--------------------
Since Bob Dalziel filled the chair in 1996, - - - about $1.28 billion in shareholder value has vanished.
---------------------
- - fund managers and the wider market tired of hearing promises that weren't delivered, year after year.
--------------------
- - he is seen as perfect for the job. Tough, aggressive and intolerant of substandard management, he is viewed as exactly the medicine Mayne needs - - - - .
Smedley to tackle the Mayne
pain
The Australian 27 June 2000
Ord Minnett analyst Wayne Gentle said the changeover removed "one of the investment obstacles that a lot of fund managers had considered were there".
$1.48m Paper Profit To
Smedley
Australian Financial Review 06/28/2000
Incoming Mayne Nickless chief executive Mr Peter Smedley and his former Colonial colleague, Mr Stuart James, are sitting on a paper profit of almost $1.5 million after being issued stock in the struggling health-care and logistics conglomerate.
Smedley Adds Zing To Mayne
Shares
The Age 06/28/2000
Mr Peter Smedley and Mr Stuart James have reaped joint paper gains of $30,000 for every hour since they were signed up - -
Smedley Gets Ready To
Operate
Australian Financial Review07/01/2000
The members of Australia's cosy health-care industry are on high alert, waiting for Peter Pacman Smedley to descend on them like some gowned-up surgeon, latexed hands held high, striding into the operating theatre. - - - - - there is likely to be some ER-type drama in the health industry in the months ahead
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But it may take more than that (increases private insurance rate) to restore the private hospitals to full health: it has been a badly run industry for a long time overcapitalised, oversupplied, inefficient and lacking in market power against the health funds.
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In a poorly performing industry, Smedley is taking over one of the worst performing portfolios: only 17 of Mayne Nickless's 47 hospitals are earning more than a 5 per cent EBIT margin on sales and the business as a whole earns only about 5 per cent return on assets half what it was just three years ago.
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In the US, vertical integration between hospital chains and health insurance firms has been quite successful. Some in Australia believe mergers between geographically compatible health funds and hospital companies would also work here.
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One thing is for sure though: with Dr Pacman wielding the scalpel at Mayne Nickless, the status quo is not an option for the health industry.
Mayne role to test Smedley
The Australian
"The averahe person just physically couldn't do what a Smedley can do," Hart says.
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It's clear high energy is a Smedley trademark.
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- - he is well known for his ruthless cost-cutting and take-no-prisoners approach but less well known for his philanthropy.
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He is chairman of Care Australia's corporate board and has worked on aid projects in Vietnam and China.
Behind The Smedley Success
Story
Australian Financial Review 07/01/2000
No matter how successful and celebrated Peter Smedley becomes, to former Shell chairman Sir Leslie Froggatt he will always be "one of my boys". Smedley was the brightest light in a group of Shell executives whom Froggatt had groomed in the 1970s to take the corporation into the new century.
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Some did not warm to Smedley's pugnacious style, some argue that his success was aided by legislative fiat which directed a torrent of money into superannuation
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Smedley's appointment to the CARE board last month went largely unnoticed in the flurry of interest in his corporate future beyond Colonial, but it speaks much about the man and his network of patronage.
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"Most new directors in their first board meeting tend to sit back and absorb information, but not Peter: he was full of questions [about CARE's operations]. 'Why are we here? Why are we there? Why do we do things this way?' That's just typical Peter," Froggatt says.
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As chief of Australian downstream operations for Shell, Smedley was already an influential player in the company, reinvigorating its retail and marketing operations and drawing bright and ambitious executives to him.When Smedley left to take on Colonial, he set off a talent drain that is still felt today. - - - - If the loss of James hurt Shell, more pain was to come. Up to half a dozen younger Shell executives ended up following Smedley to Colonial, throwing their lot in with the charismatic chief executive.
- - the Shell management philosophy as taught by Froggatt during his term as chief executive from 1969 until 1980. "- - - - By the time he left Shell, Peter was a very well-rounded executive," Froggatt says.
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Colleagues - - - speak of his hard-driving intellect, and how he encouraged voices of dissent in the boardroom only to silence them with his vice-like grip on an issue."His focus was always on shareholder value - it was hard to argue with," Garnsworthy says.
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"There was no way you would ever say Peter would skate over an issue. He would go straight to the guts of an issue and pull it to pieces before coming up with his plan."
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Colleagues say intellectual credibility and fairness, rather than personal warmth, created loyalty in Smedley's executives.There is a sense of anticipation that Smedley's first year will be frenetic as he takes on costs - - - - "It won't take a year, more like six months and you'll see action from Peter," Percival says.
Costs will be a major focus.
When addressing Colonial staff in 1994, Smedley told them bluntly: "Take a good look, because in 12 months half of you will not be here."
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Smedley has a tight network of consultants to draw on. Former Prime Minister Paul Keating was instrumental in assisting Colonial to beat National Mutual to an insurance licence in China.
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"Peter Smedley has the capacity to develop a clear business model in his mind and pursue it," Keating told The Australian Financial Review."In respect of Asia, he had a consistent strategic view of the importance of the Asian markets."
Keating might find himself working alongside Smedley again as Smedley tackles Mayne's Asian operations.
Peter Smedley: Health Care's
Rude Shock
Australian Financial Review 06/22/2001
- - - has many attributes. One of them is a deep-rooted impatience, a hatred of being behind schedule.Another is a deep sense of self-importance, perhaps bred of half a lifetime spent working in an oil company more powerful than most United Nations member countries.
Smedley was asked to wait in a Finance Ministry waiting room for about 30 minutes. But half an hour was an unbearable lifetime for Smedley, who promptly stormed out of the building and off to his next meeting. - - - - Smedley's Jakarta stormout is one of dozens of colourful anecdotes that have surfaced since the Commonwealth Bank's takeover of Colonial - - -
Australia's conservative and clubby health-care industry - - - - - - is in for a rude shock.
Smedley, who declined to be interviewed for this article, is a smasher of established cliques and business models.
What is not known, outside of the group of 50-odd executives who had daily contact with Smedley, is the role played by Smedley's powerful and aggressive personality in those outcomes. - - - - Smedley stands out like a rough diamond on a mullock heap.
Smedley is one of the last living examples of ``management by fear'' chief executives, a boss who invoked an almost evenly balanced mix of fear, loathing and admiration among those who worked for him.
- - - - Smedley is an unreconstructed 1950s-style command-control manager. And there is only one person in command.
Former Colonial executives say Smedley's chief motivational tool is fear, tempered by an unshakeable loyalty to those who are totally loyal to him and a soft spot for those down on their luck.
``He will find your weak parts and hit you there,'' says one former Colonial executive. ``But there is a human side to him. When things go wrong in your family he will do everything to help you out.'' - - - - - - achieved massive organisational change at Colonial by creating a ``climate of fear'' that penetrated most of the top levels.
``No matter what you did, Peter always made sure that you always felt slightly off balance,'' says an executive who reported to Smedley. ``He is a difficult bloke to work for.''
There are many ways in which Smedley kept his senior executives off balance. Perhaps the most important was by creating an alternative reporting system,
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Not long after Smedley joined Colonial, former staffers say, he established numerous teams of mostly junior people. - - - - to report back to Smedley on the performance of the business unit boss.``The teams reported directly to Smedley, and they reported on the management of the business unit. You could not [overestimate] the lack of trust, undermining and suspicion this created. A lot of people couldn't handle it and bodies started flying everywhere.''
Smedley also devoted a lot of time to building low-level contacts inside the organisation to give feedback on the performance of executives.
``Smedley walked around the building a lot,'' says one former staffer. ``He had personal contacts everywhere and he knows everyone's name and what they do. He never forgets a thing. He has spies at every level of the organisation.''
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According to former executives, Smedley was obsessive about meeting profit targets and would not tolerate having the wool pulled over his eyes.
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Consequently, when the manager of the business unit called to report their numbers, Smedley already knew the facts. - - - - -``You knew he was getting two inputs,'' says one former executive. ``You knew he had the information hours before you did, and you were at a disadvantage.''
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``He keeps everyone guessing what his real opinions are,'' says one former staffer.''
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Two of Smedley's other habits, former employees say, were the public dressing down and what staffers called the ``predetermined meeting''.Very early on, Colonial staff learnt never to question or debate a topic on which Smedley had developed a strong view. Staffers learnt that to question a proposal too hard came at the risk of a terse public dressing down or, worse, the sack.
``He intimidates people. He shouts you down in front of other people. You never take him on in an open forum,'' says one former Colonial executive.
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``About half of the meetings were predetermined with Peter,'' says one former executive. ``There was very little that could be discussed in an open forum. Most of the decisions had been taken beforehand. The point of the meeting was to confirm or approve a decision that Smedley had made beforehand.''Another aspect of Smedley's control culture is an obsession with meeting or exceeding targets and with projecting an image of a company that was far bigger than it really was, a company that could take on the world.
Smedley's obsession with managing and beating market expectations was on display when Colonial purchased the Australian and New Zealand life insurance operations of Prudential Corp in 1997.
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A stock exchange announcement was drafted that included the $70 million number and sent to Smedley's office. But when the market release came back from Smedley's office, the forecast first-year savings target had been crossed out and replaced with $50 million.``When the company delivered $65 million in savings in the first year from the Pru, the media and the broking community said that Smedley had outperformed,''
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When Smedley arrived, he demanded staff arrange a much larger and more expensive room. Colonial might have been a small player in Asia, but Smedley was determined to exude an image of power and size.Former Colonial staff say that Smedley's desire to manage all external constituencies also extended to the board of directors. Before board meetings Smedley was famous for grilling staff and executives on every aspect of the business so that any question from another director could be answered immediately, leaving no nagging questions in the minds of the questioner.
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``He saw the board members as having no involvement in the detail but saw them having a role in big-picture strategy issues,'' the same director says. ``When there were questions on the detail there was a little bit of a snapped response. Sometimes he needed reminding that we were all on the same side.''
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One inconsistency tolerated under Smedley's command-control culture at Colonial was his whimsical ability to ignore firm policies or strategic decisions when he felt that he needed to let a divisional leader have more rope.
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``Our department decided to get around this by purchasing the new system in small bits and pieces. Smedley, of course, knew what we were doing but he never said a word. When the new system was a great success, Smedley claimed it as his own. If it had gone wrong I'm sure we would all have got the boot.''While most autocratic leaders generate an underground resistance movement, none emerged in Colonial. One possible reason was Smedley's penchant for ridding the organisation of dissenting executives around whom a clique could develop. The other was Smedley's decision to surround himself with a group of executives who were fiercely loyal. The ``club within a club'' as they were known, were mostly former employees of Shell Australia, where Smedley had spent most of his business life.
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Former staffers estimate that dozens of former Shell employees ended up working at Colonial. Many of the same team have since followed Smedley to Mayne Nickless.
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While ``Team Smedley'' no doubt provides continuity, it has reportedly created a them-and-us split at Mayne. One former Mayne executive says: ``I left because I was never going to be part of the inner circle.''While many former Colonial executives criticise Smedley's ``management by fear'' approach, most can advance a coherent argument as to why they stayed working for him so long. And, despite their private criticisms, many say they would work for Smedley again.
One long-suffering Smedley subordinate said Smedley was like a velvet fist in a mailed glove: his bark was often far worse than his bite.
There is no doubt that Smedley showed genuine sympathy for the less fortunate of his regime.
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Smedley also won support for generosity towards employees with health or family problem.
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Smedley is big on family. When there was a problem involving family, Smedley always told people to put their family first and work second.''
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Smedley also won loyalty with his attitude to money and remuneration promised. - - - - Not so with Smedley: former executives say Smedley was fastidious about rewarding executives who met performance targets.``Everything he promised me, he delivered,'' says one ex-Colonial. ``If you hit the target he invariably pays you the bonus he promised, no questions asked. He always keeps promises.''
And Smedley was generous to those who performed, regardless of whether or not they were part of his inner circle.
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Apart from money, the other allure of working on the Smedley team was that of being on a winning team.
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``I did not enjoy it personally,'' says one former Colonial. ``If it had gone on for another two years, I probably would have left. It was all so hard and it's difficult to keep up with him. But we got great results.''
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While most brokers and fund managers are in awe of Smedley's tough guy approach to management, and argue that the health care sector is ripe for some Smedley-style takeover action, many former Colonial executives caution that the Smedley management style won't work in all situations.Some of the hallmarks of the Smedley style are a big focus on branding, obtaining control of ownership of the distribution system, ruthless cost controls and the rigorous application of a set decision-making process.
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However, for the Smedley template to work at Mayne Nickless, some established industry structures will need to yield. In the health care area the distribution system (as the Smedley models sees it) is the humble suburban general practitioner. In the Smedley world-view, the GP and, to some extent, the private health funds own the customer and therefore the distribution system. Former Smedley subordinates say that, on past form, his next moves will be to vertically integrate through the purchase of one or two major health funds and large numbers of suburban medical clinics.
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``If he took over a company where you had to create a flat structure, where there had to be a lot of autonomy, he would really struggle.''
Shell-style Management Hangs On
Talent
Australian Financial Review06/27/2001 (Letter David
Arelette)
lvor Ries writes with a degree of surprise in his article on Peter Smedley (``Health care's rude shock'', AFR, June 22).
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Before time changed Smedley's mane (a poor pun I admit, Gov'), he was universally known as the Red-Headed Terror inside his old company, Shell.
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What is reported are very much Shell methods
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The success secret of the Shell information bypass method is that whoever uses this information never compromises their source,
Web Page
History
This page created November 2001 by
Michael
Wynne
Format changed Nov 2005
